The Overpopulation Debate: Does the World Need More Mouths to Feed?

I have been writing a lot about Trump's tariffs in the past few weeks, whether it is the auto tariffs, the so-called "reciprocal" tariffs, or the incoherent "logic" of the tariffs. I need a break from tariffs and write about a topic that has been sitting in my backlog for a while: overpopulation. Since the early 19th century, the global population has grown from 1 billion people to over 8 people. The United Nations estimates that the planet will reach its peak around the end of century with about 10.4 billion people. The concern that summarizes the overpopulation debate is whether the global human population is exceeding Planet Earth's ability to sustain everyone while causing ecological and social consequences along the way.  

This debate dates back to Thomas Malthus, who predicted that the global population would outstrip food production to the point of causing global famine. It looks like Malthus posthumously has egg on his face, pun intended. According to the U.S. Department of Agriculture, the global population doubled in the past six decades while global agricultural production increased by nearly four-fold in that same time period. As Oxford brings up, much of that productivity was due to using technology to increase the yield output, which has dramatically reduced arable land use on a per capita basis. The famous Simon-Ehrlich wager was another example of how the resource scarcity argument was challenged. This bet eventually led to the Simon Abundance Index, which shows that we as a species are 509.4 percent more abundant now than we were in 1980. 

I do find the argument that technological development and human creativity can help us through natural resources management to be a compelling one because it is not based on a static model or zero-sum thinking. I find the technological progress in the agricultural sector to be on a good enough trajectory where I do not have too many worries. That does not mean I do not have any concerns about resources on the planet. 

The big one that draws my attention has to do with water. I first brought up the concern about water management in 2014, specifically with regards to water subsidies artificially increasing the demand of water to the point of people running out of water. If we, as a species, do not find a way to manage water efficiently, I fear that there will be wars over water in a way that there have been wars over oil in the past. Then there's matter of deforestation. While there is some reforestation going on, the net global trend is that humans are responsible for up to 10 million hectares of forest, which is the size of Portugal for context. Conversely, the regions with reforestation are the ones with greater economic development and freedom. Even with fracking, there is only a limited supply of fossil fuels that exist. Goldman Sachs predicts that we will not reach peak oil for another decade. 

Then there is the matter of infrastructure strain. There is a strained housing supply and increased homelessness in much of the world, but I first and foremost put the blame on land use regulations, rent control, and other government regulations that artificially restrict housing supply. Whether schools, hospitals, and transportation systems can handle the population growth is up for debate, as well. Keep in mind that the population growth is projected to happen in developing countries where these strains are most likely to be felt. The bigger issue with developed countries is going to be the lower birth rates. Why? Because as the population is aging, there will be greater economic and social challenges. One of those there will be fewer young people in the workforce to support older people, especially when it comes to retirement accounts such as Social Security. 

There are challenges to be had, regardless of whether there is a population increase or a population decline. I do not find myself unequivocally on one side or the other. As has been the case in the past, I do find that technological development will be a major component in the years ahead. I do think that it comes down to what progress comes out and how governments across the world respond. China's One Child Policy was a nightmare with unintended consequences, so maybe forced sterilization and coerced population control is not the way to go. 

Unsurprisingly, I am going to argue that the greater that red tape, regulations, and government programs can be reduced in size, the better we can handle the effects, whether it is reaching the population peak later this century or the countries that have or are going to see a decline in their populations due to declining birth rates. I do hope that ingenuity and technological progress triumph over the age-old economic question of how to manage resource scarcity, but time will tell. 

Should Other States Follow Mississippi's Lead on Eliminating the State Income Tax?

After months of infighting in its legislature, Mississippi passed a bill (House Bill 1) earlier this month to eliminate its state income tax. This will make Mississippi the tenth state to eliminate its state income tax. With the exception of the state of Washington, the other eight states are red states: Alaska, Florida, Nevada, New Hampshire, Tennessee, South Dakota, Texas, and Wyoming. The Mississippi Center for Public Policy, which is a free-market, conservative think tank, was happy because it believes that eliminating the state income tax will be a magnet for growth. Does this theory play out in practice or is this simply a free-market fantasy that will come back to bite Mississippi later? 

When thinking about government budgeting, there are two basic components: tax revenue and spending (expenditures). Taking a look at Mississippi, an important question is how they will deal with taxing and spending as their income tax phases out over the next decade. Will Mississippi increase other tax rates to compensate for the revenue loss? 

I have some concerns for Mississippi specifically. Other states have better mechanisms to compensate for a lack of income tax, usually through consumption taxes. Florida can sustain its economy with tourism, agriculture, and healthcare. Texas and Alaska have large oil reserves. Nevada has Las Vegas. Mississippi has historically relied on more labor-intensive industries combined with a lower labor force participation rate, lower educational attainment rate, and higher poverty rate. 

There are also general concerns about relying on the sales tax in lieu of the income tax. As the National Conference of State Legislatures (NCSL) brings up, the average sales tax breadth, which is the percent of the economy included in the sales tax base, was higher in the 1970s than it is now, i.e., 49 percent versus 30 percent. This lower sales tax breadth has been combined with a higher sales tax rate. To make sales tax a viable replacement, the sales tax would need to be high enough and applied to enough of the state economy to generate adequate revenue. 

So if Mississippi cannot completely compensate for revenue losses with consumption taxes, will Mississippi get its spending under control? That would be nice, but I am concerned about Mississippi's ability to cut budgetary spending because Mississippi has not shown budgetary restraint in recent years. On the other hand, Mississippi has the fourth lowest dependency on the income tax out of all states. 

Looking at the Financial State of the States report from think tank Truth in Accounting, I am not surprised that three out of the five states in the best shape do not have an income tax, whereas the states in the worst shape (especially in terms of per capita debt levels) are amongst the states with either the highest income tax rates or well above average. The American Legislative Exchange Council (ALEC) shows some data in its Rich States, Poor States report that income rates and progressivity factor into the equation. Clearly, the income tax rate is not the only factor in fiscal health. However, it would be naive to think it does not play any major role whatsoever, especially given net migration patterns in which those living in higher-tax states are heading for lower-tax states (Census).

A longitudinal study from the Cato Institute examined income taxes from 1964 to 2004. The conclusion was that states with higher income taxes "stifled economic growth, entrepreneurialism, and access to capital (Poulson and Kaplan, 2008)." So maybe the Mississippi Center for Public Policy is right. Even if Mississippi is not in the best of shape right now, maybe that lower income tax could attract investment and more talented labor to build Mississippi's economy into a formidable one. 

However, I do not think that the answer is a simple "yes or no." As I have brought up before, good tax policy is not as simple as "tax cuts good, tax hikes bad." If a state is looking to avoid some of the less desirable aspects of an income tax, then there needs to be an alternative that is fiscally sustainable. 

As the Council on State Taxation (COST) details in its extensive report, the U.S. sales tax system deviates from the three main components of an optimal consumption tax: (1) a harmonized and broad-based consumption tax on household goods and services; (2) an exemption (or credit) for business inputs; and (3) centralized and simplified tax administration. COST ultimately recommends a hybrid federal/state government consumption tax similar to that of Canada.

Regardless of how states go about it, I will say this to conclude. If states are going to transition from relying on income tax to consumption taxes, they need to be sure they have a source of revenue that is adequate to replace the income tax and can do without creating economic distortions or administrative issues. Aside from the restructuring of tax systems, there would need to be a reassessment of government spending. Otherwise, the potential for state economic instability is real. 

UK Supreme Court Acknowledges Biological Reality That Only Biological Females Are Women

Henry Ford once said that "Whether you think you can or think you can't, you're right." The premise behind his quote was that the power of mindset and belief in terms of achieving goals. Cultural relativists have taken that concept to a whole new level with gender identity. While biological sex refers to one's chromosomes, hormones, organs, and anatomy, gender identity proponents argue that gender identity pertains to "one's inner sense of being male or female," i.e., inner self-perception. Under this framework, gender identity aligns with one's biological sex for the vast majority of people. However, there are a small minority of people for whom there is a disconnect between biological sense and gender identity, which is where gender dysphoria comes into play. The diagram below summarizes the differences. 

As this diagram illustrates, the idea of biological sex and gender identity are, at least conceptually, two different things. Even if that were the case, where the left took a turn to Looneyville is by conflating the two and asserting that your gender identity is biological reality to the point where denying someone's gender identity is tantamount to bigotry. Under this schema, you can become a man or woman (or however you choose to identify) simply by identifying as one. It is how those in the trans rights or trans activism world and its allies support biological men playing in women's sports, supporting gender-affirming "care" when the evidence base is anything but affirming, or ironically (or maybe that is unironic) being homophobic enough to insist that gay people should date trans people lest they be branded transphobes. 

This concept of gender identity brings us to current events. Last week, the United Kingdom's Supreme Court ruled unanimously in the case of Women Scotland Ltd. vs The Scottish Ministers that the word "sex" in the Equality Act 2010 refers to male and female, as determined by biology. While those on the Left view it as an indictment of how prevalent anti-trans sentiment has spread, I view it as a win of reality over adhering to ideology. The ruling is a reminder that acknowledging biological reality is not a form of bigotry and that no amount of bureaucracy can transform a man into a woman.  To quote media outlet Spiked Online: 

"Cosmetic surgery and a piece of paper don't make a man a woman any more than a deep desire to be female does. Besides, gender identity has always just been about feeling and pronouncement. It is not a concrete, verifiable, or coherent concept." 

Gender identity is neither concrete nor coherent. Those who profess the importance of gender identity treat it as some sort of objective truth, but that it can also be changed at one's subjective whim. And if you do not accept the new gender identity, you will get labeled a bigot like J.K. Rowling did. If gender identity were that concrete, they would have come up with a definition of "what is a woman" that does not rely on the circular logic of "a woman is someone who feels like a woman." Not that I agree with Matt Walsh on everything, but this circular logic was the whole point of his documentary "What Is A Woman?" This adherence to ideology would explain why U.S. Supreme Court Justice Ketanji Brown Jackson could not provide a definition of a woman at her confirmation hearing. 

The fact that some on the Left argue that gender is a social construct and others argue that gender identity is internal and biological further illustrates its incoherence. After all, if your genitals do not establish your gender, then why does removing them affirm your gender? Gender cannot be simultaneously a social construct and inherent to the individual. It cannot simultaneously exist as self-chosen and a product of socialization. Nor can gender simultaneously be independent of sex and defined in reference to sex.

This particular incoherence puts the LGBT community in a real bind. If the idea of "man" and "woman" are based on biological sex, then LGB is intelligible and the T makes less sense because then the definitions of "man" and "woman" are based on sexual attraction. If being a "man" or "woman" is not tied in biology or physical form, then sexual attraction/orientation or being LGB is no longer intelligible. This point came up when I wrote a piece last year showing how advocating for the trans community and kowtowing to every demand of trans activists means a path towards gay erasure.

Simply because you feel something or identify as someone does not make it so. I have an affinity for the Latino world and my Spanish is good enough where I have passed for Argentinean on multiple occasions. I do not going around claiming that I am Latino, even when there are days that I wish I were Latino. If anything, I correct people when they call me Latino because the truth is that my ancestors are from northern and central Europe. Someone who is 50 or 60 years old who identifies as 16 does not magically become a teenager by simply wishing they were younger or identifying as a teenager. Since those who believe in gender ideology opened the Pandora's box in terms of "your identity is your reality," I can go as far as saying that if a friend of mine were to identify as a cat, I would not congratulate him/her and go out to buy a scratch pole and litter box. I would be legitimately concerned for their mental health. 

Truth and words matter. Trans activists argue that trans issues only affect those who identify as "trans men" or "trans women," but this affects everyone because truth and what constitutes as a fact are on the line. What is the harm by linguistically accommodating someone by using their preferred pronouns or chosen name? 

If a consenting adult wants to undergo gender affirming surgery, I do not mind as long as it is done with informed consent. I wish those who are dealing with gender dysphoria the best in overcoming or at least learning to live with the dysphoria. I am against this procedure for children because a) the evidence base does not show significant benefit while there are considerable harms and b) over 80 percent of adolescents that experience gender dysphoria outgrow it by their adulthood without medical or surgical intervention. Both points undermine the need for such procedures as a norm rather than an exigent exception, but I am getting off track. I am okay with transgender people serving in the military and I think a transgender bathroom ban is unnecessary. Part of being libertarian is allowing consenting adults to do what they want with their lives as long as they are not harming others, and that includes transgender individuals. 

What I take issue with is that we are being asked is to accept a lie. As much as gender-reassignment surgery could be helpful for a small minority of those dealing with gender dysphoria, and as much I try to imagine the struggle of those undergoing gender dysphoria, it does not change the reality that surgery does not magically turn a man into a woman, or vice versa. 

How we navigate, describe, and refer to the world matters if we want to observe an objective reality. It is with that discernment that we can best identify problems in public policy and in society, as well as come up with solutions. After all, how can we protect human rights if we are not doing so on the basis of reality or what humanity entails? It does no one any good to perpetuate a lie, especially if your political posturing is that of "follow the science." As Ben Shapiro would say, "Facts don't care about your feelings." 

The fact that we even need to have a Supreme Court ruling to declare a basic biological truth that has been obvious across civilizations and centuries, not to mention in the animal kingdom, shows how much global society has devolved in recent years. Up is down, terrorists are freedom fighters, and men are women. Welcome to 2025! It is good to see people stand up to the relativism. As much gaslighting as there has been with "transmen are men" and "transwomen are women," more people are waking up instead of being woke. 

We should wake up because our freedom of speech and expression are at stake. Self-assured social movements have no need of censorship -- only the morally unsure and intellectually insecure require such brute instruments. It would explain why the trans right movement leans on censorship and conformity to try to get its way. Contrast that with the civil rights movement, the women's suffrage movement, or the gay rights movement that did not have to resort to such tactics. 

The UK Supreme Court ruling is another data point that shows that the Far Left went too far with gender ideology and to reaffirm that manhood or womanhood are more than a matter than self-identify or what legal paperwork might say. I do not want there to be a backlash that results in violence against trans individuals, but I also want a world where we can speak truth to power and not feel intimidated in speaking out simply because disagreeing with one’s perception of the world or oneself is too much for someone to handle. I hope this Supreme Court ruling is an indication that freedom of expression is heading the right direction in terms of there being less authoritarianism and greater free speech for all. 

Resolving the Paradox of Passover Celebrating Freedom and Celebrating by Restricting Dietary Freedom

It's that wonderful time of the year Passover. Jews commemorate the Exodus story with an elaborate ritual feast called the Seder. As I pointed out last week, the Exodus story celebrates how the ancient Israelites went from slavery to freedom. That freedom is so essential that one of the names for Passover is זמן חרותנו, which is Hebrew for "time of our freedom." 

I look to the etymology of the word "freedom" when I think about this holiday. The word "freedom" comes from the Old English freo, which means "not in bondage" or "acting of one's own will." It can also mean "noble" or "joyful." The "acting of one's own will" part is important because that free will implies the ability to choose. If freedom is about one's ability to choose, why in the world would Jews celebrate liberation with the prohibition of chametz? 

What does a prohibition of eating leavened products made from wheat, barley, oats, rye, or spelt have to do with freedom? How does curtailing one's dietary freedom symbolize or commemorate freedom? Isn't restricting dietary freedom the opposite of being free if being free means to do something without restriction or limitation? These questions have been bugging me since I went shopping for Passover food because I very much want to resolve the paradox. 

Back in 2012, I contrasted chametz with matzah. Chemically speaking, they are essentially the same ingredients. The difference is that the chametz went through a fermentation process. In other words, it becomes inflated both physically and metaphorically. That is why Judaism treats chametz as a representation of pride, ego, arrogance, entitlement. It is about a bloated sense of self. The matzah, on the other hand, represents one's true and aware self without the fluff. As R. Aron Moses reminds us, "if your soul has not had the opportunity to be expressed, then you are not yet free." By abstaining from chametz for a few days, we strip away what is unnecessary, or to think of it in another way, what is getting in the way of us being truly free. 

To go back to what I wrote last week, that idea of leaving Egypt (Mitzrayim, מצריים; literally meaning "narrow places") is not only in reference to the country, but also a narrow place that exists within ourselves. Whether it is Rob Dial Jr., Mel Robbins, or Lewis Howes, I have heard such podcasters and personal development/motivational speakers talk about how personal development is less about adding on new habits and more about stripping away bad habits, negative thought patterns, and limiting beliefs that no longer serve us, or removing the fluff that chametz represents. 

Freedom from a Pharaoh is one thing and certainly is worth celebrating. Acquiring freedom from ourselves is deep work. To quote the Jewish text Pirke Avot, the Ethics of Our Fathers, "Who is strong? One who subdues his [evil] inclination (4:1)." While I have dealt with some metaphorical Pharaohs in my life, I also have caught myself being my own worst enemy on more than one occasion, as hard as that is to admit. 

This brings us to another aspect of this freedom has to do with another practice in Judaism. In 2020, I explored a similar paradox with the Jewish observance of Tisha B'Av. One of the practices during that time of year is to abstain from meat and wine for nine days since those consumables represent joy in Judaism. It turns out that diminishing happiness for a bit can actually make you happier in the greater sense. The common theme between this Tisha B'Av practice and restricting chametz has to do with that self-limiting in certain aspects, even for a bit, can make life more fulfilling and freeing. 

Free will and having options are essential to freedom. Politically and culturally speaking, I strongly believe we ought to be free to choose what to do, believe, think, and say. To channel Jean-Paul Sartre, it gives us the ability to create meaning in life and make something of ourselves. I also think that part of being free has to do with us deciding to limit our own choices. How does that work? If freedom strictly means to do whatever you want for its own sake, it is chaos, especially when that comes into contact with other people and their choices. Without a path, goals, or a vision, I have to ask the question of "freedom to do what?" Freedom is an essential ingredient for a well-lived life, but what good is freedom without direction? 

To quote Rohan Kapur, "True choice isn't about quantity; it's about the conscious decision to relinquish what no longer serves us, paving the way for what does."Mark Manson brings up that there is a paradox of choice. The more options we have, the less satisfied we are. That is because with so many options, the opportunity cost is higher. We become aware of what we give up with each option, and that minimizes one's propensity to commit to something, whether it's a brand of shampoo, a career path, or a romantic partner. This could also help explain the phenomenon of decision fatigue. 

We have to face facts that by being finite creatures, there are limitations as to what we can do. We cannot have it all, no matter how much we would like to have it all. Rather than try to do it all and succumb to FOMO (Fear of Missing Out), we should ask ourselves what matters to us most based on those limitations, as well as our priorities and values. By rejecting alternatives, by giving up certain freedoms while choosing to commit to others can our freedom become meaningful. 

If Mark Manson is right, then a way to resolve the paradox is to say "No" to certain things while committing to actions that multiply our freedoms. One example is staying in physical shape. To successfully do so, there are certain things you cannot do, such as eat a lot of processed foods or binge-drink alcohol. While there are certain limitations on consumption, it also provides you the freedom to do a lot of physical activities that were previously inaccessible or infeasible. If you commit to certain interpersonal relationships, that commitment can help you emotionally mature, even if it means limiting other options. As I mentioned a couple of years ago, opening yourself up to kindness and giving to others is, within reason and having at least some personal boundaries, a way to expand one's freedom. That is in part because there are more options when you think about more people than yourself versus only thinking about yourself. Also, people in your life can help you reach different heights than you would have reached if you were only by yourself.

This is where discipline comes in. Take playing a musical instrument. At first, you cannot creatively express yourself. It takes time, effort, and discipline to learn how to read music and play an instrument. After a while, that discipline tends to pay off with greater creative expression and freedom. But that creative expression also came at the price of saying "No" to other things while practicing scales, fingering, études, chords, and difficult passages. Athletes who train for a marathon or the Olympics; monks or nuns who take on vows; or writers who take on poetic forms can gain clarity, depth or purpose from the discipline. I am not saying that you need to necessarily do something that intense in order to be free, but rather that discipline and saying "no" to certain things can carry us to experiences and freedoms that were previously closed off to us.

I think what I am trying to say is that this can be applied with chametz and what chametz represents. The restriction of chametz beckons us to ask what is serving us and what is not. It invites us to examine what is worth saying "no" to and what is worth a commitment in life. In short, chametz is a reminder that freedom is not about living with the absence of boundaries, but choosing the boundaries that optimize one's quality of life and one's freedom. It helps us choose mindfulness over mindlessness. It means that freedom is not something that we passively receive from G-d or the government, but rather is something that we actively create every day in our lives. 

Trump's Tariff Rationales Are As Incoherent As They Are Self-Contradictory

"They left as soon as they came." That is somewhat an accurate depiction of Trump's latest barrage of tariffs. On April 2, what Trump called "Liberation Day," he implemented a two-tier tariff system. In addition to there being a baseline 10 percent tariff on imports, he also imposed so-called "reciprocal" tariffs on 90 countries based on what he purported were other countries' tariff rates. As I pointed out in my critique of Trump's "Liberation Day" tariffs last week, his tariff rates were not calculated based off of other countries' tariff rates (he lied about that part), but rather other countries' trade imbalances. Rather than being taken as liberating news, the stock market ended up crashing to the point of causing the biggest two-day wipeout in U.S. history. 

Last Wednesday (April 9), Trump announced a 90-day pause on that second tier of tariffs (i.e., the ones above 10 percent), with the notable exception of China. The baseline 10 percent tariffs on imports remain intact. The Dow Jones, NASDAQ, and S&P have somewhat recovered from the fall. However, JP Morgan and investment firm Blackrock are still anticipating a recession this year, as are a majority of respondents from the quarterly Chief Financial Officer (CFO) Council Survey. 

I had a piece about how these tariffs could unsurprisingly cause a recession all ready to go, but I had to hold off because of this latest development....at least for now. I might end up publishing it here at a later date if Trump reinstates the second, higher tier of tariffs. In the meantime, I want to point out how incoherent this whole strategy has been. He threatens these high rates and then he rescinds them, at least temporarily, the moment the stock market decides to tank. It is not simply the haphazard, unpredictable modus operandi that bothers me, but also the rationales that Trump uses to justify the tariffs. From what one can gather, the Trump administration has laid out three main rationales for these tariffs.

1. A negotiating tool. On April 4, Trump said that the new trade barriers give the U.S. great power to negotiate better trade terms. This gets to the theme that Trump is trying to rectify what he sees as "injustices of global trade" that the U.S. has had to endure.
2. Increase government revenue. This is the argument particularly used by Trump's lead trade advisor, Peter Navarro. Even Trump himself has floated the idea repeatedly of repealing the income tax and replace it with tariffs. The Tax Foundation explains how that plan would not work, but I digress.
3. Bring manufacturing back to the United States. In a White House fact sheet, the Trump administration claimed that trade deficits are hollowing out the U.S. manufacturing base. He plans on using tariffs to revitalize U.S. manufacturing. 

Forget for a moment that the Trump administration's messaging about whether the tariffs are short-term negotiating tool or a long-term source of government revenue is inconsistent. I take issue with all three of these rationales by themselves. Trade deficits are not bad for the United States. The manufacturing sector is not going to have a revival akin to what it was like in the 1950s, in no small part to technological progress. U.S. tariffs are ultimately a tax on U.S. consumers and producers because that is where most of the tax incidence occurs. That is how it worked with the Trump tariffs from his first term. And as I have explained numerous times, collecting tariffs come with considerable economic harm to the American workers and small businesses that Trump claims to help. 

What makes the Trump administration's rationales for tariffs is that when put together, they make zero sense. They create an impossible trinity because if one of these rationales is true, then the other two cannot be true. How so?

Take the "tariffs as a negotiating tool" argument. If tariffs are merely a negotiating tool to make other countries comply with Trump's demands, then the tariffs are not collecting revenue because they are not ultimately implemented. That also means the tariffs cannot afford domestic manufacturing the protection it would need to rebuild. 

What about the "government revenue" argument? If the government is collecting this tax revenue, it means that the tariffs were more than a negotiating tactic. It also means that if the tariffs are successful in collecting tax revenue, it also means that foreign goods are still crossing the border. So naturally, they are not creating jobs at home because the trade flows have not significantly changed.  

If the tariffs are being used to bring manufacturing back, then they are more than a mere negotiating tool because the taxes have been implemented. However, if manufacturing has indeed come back to the United States because of the tariffs, that means production is taking place in the United States and the United States is exporting. The idea with this rationale is to create a cheaper domestic product, which ideally for Trump would mean avoiding imports. Since the tariffs here are import taxes, the government is not going to be collecting all this wonderful revenue to make government coffers great again. 

As I have pointed out since 2016, Trump's love affair with tariffs is a torrid one rife with torment and anguish. The Trump administration's communication with tariffs has been incoherent, showing that impulse is dominating the decisions, not clearly thought out, serious policy decisions. Sometimes tariffs are presented as a short-term negotiation tool used to bludgeon other countries into submitting to Trump's will. On the other hand, Trump says things like "my policies never change." His Commerce Secretary also said that the tariffs will stay in place, which was only three days before Trump announced the pause. So which is it: short-term negotiating tool or long-term government policy? 

An important lesson I remember from my days as a market researcher is that the one of the only things that business owners generally have a bigger issue with than red tape is market uncertainty. Why? Uncertainty is not conducive for businesses to make investment decisions. Businesses make plans months or years in advance in the hopes that investments pay off in terms of increasing profit and equity. Consumers also feel better when purchasing goods or services from businesses and knowing that those businesses have a high likelihood of staying in business. It is hard to maintain that confidence when Trump is being impulsive and making major trade policy decisions "from the heart."

Although the Trump administration is uncertain with how it wants to try to dupe the American people in falsely believing that tariffs are the greatest thing since sliced bread made solely in the US of A, what is certain is that this inordinate amount of trade uncertainty with Trump's tariff nonsense is going to put the American economy in a tumult and the stock market going up and down like a yo-yo until there is clarity. 

Unless Congress can end the president's deceptive "emergency" declarations and retake the tariff power that the Constitution grants it, odds are we will be back here in three months with Trump reinstating the tariffs because he is the one holding all the cards. In the meantime, it will be the American people and businesses who will suffer from this tariff nonsense. 

Avadim Hayinu: Freedom Is As Important Now As It Was During the Exodus

With Passover coming up this weekend, it is difficult not to think about freedom. It is such an essential component of the holiday that one of the names for Passover is זמן חרותנו, which is Hebrew for "time of our freedom." During the Passover seder, we recount the story of the Exodus. After asking the Four Questions, the reply is a passage called Avadim Hayinu. While the passage is about a paragraph long, the popularized song goes something like this:

עבדים היינו, לפרעה במצרים עתה, בני חורין.

We were slaves to the Pharaoh in Egypt. Now we are free. 

It is elegant in its simplicity. The fact that the Exodus story is part of what it means to be Jewish cannot be emphasized enough. It is Jewish practice to remember the Exodus every day (Deuteronomy 16:3). On top of that, the Talmud (Pesachim 116b) states that Jews are not simply meant to retell the Exodus story during Passover, but to actually relive it as if we were there. I love that directive because it means it is not confined to the past. It is something we can make relevant for us in the twenty-first century. To quote the late Rabbi Jonathan Sacks:

We do not tell the narrative of the Exodus to know what happened in the past. We do so because each telling engraves that event more thoroughly in our memories, and because each year adds its own insights and interpretations. Judaism is a constant dialogue between past and present, and since the present always changes, there is always a new juxtapositions, a new facet of the story...The story of Pesach [Passover] never grows old, because the struggle for freedom never ends, and therefore each generation adds its own commentary to the old-new story.

We can view this contrast between slavery and freedom, between new and old, in modern times. One is that slavery still exists. According to the most recent estimates of the International Labour Organization (ILO), there are still 50 million people on Earth who are in some form of physical slavery, whether that is human trafficking, debt bondage, forced labor, or forced marriage. That is close to one percent of the planet that experiences the hardship of slavery that the ancient Israelites would recognize and emphathize with. Given the damage done to political and economic freedom during the pandemic and due to the lockdowns, I lament the trend away from freedom and towards authoritarianism, a trend that is decidedly contra the spirit of Passover. 

While Passover recalls the physical slavery of the Israelites building pyramids and being reduced to squalor conditions, it is much more than that. There are millions on the planet that are trapped by grinding poverty. For those who are fortunate enough to be spared the vicissitudes of poverty, you can physically be free while still having a slave mindset. 

There is a spiritual or mental version of slavery, whether that comes in the form of negative habits, limiting beliefs, addictions, not surpassing past traumas, consumerism, keeping up with the Joneses, social comparison on social media or a job that burns you out and sucks your energy. As I wrote in 2014, slavery was about removing the slavery mindset as much is was removing the literal chains of bondage. The Sefat Emet taught that we see ourselves as coming out of Egypt because there is a dimension of Egypt that resides in us. Each of us carries some form of slavery inside us that we continue working on and working through. True redemption, much like the revelation of receiving Torah, is a continuous process. Spiritual liberation is working on what holds us back and freeing us from those forms of slavery. 

You might respond by saying "That's easier said than done." Newsflash: that is the case for everything in life. Freedom is not G-d performing a miracle and everything is hunky-dory. It is a process that we are meant to participate in if we want to be free. The lyrics of Avadim Hayinu both recognize the painful parts of our past and recognize that progress is in our grasps. It also recognizes that change is possible and that who we were before does not dictate who we are and who we can become. 

That recognition gets at being free. The Hebrew for gratitude (הכרת הטוב) literally means "recognizing the good." If we cannot recognize the good, if we only look at the bad, we cannot be free. It is such a poignant point that I pointed out a few ways we can use the Passover story to be freer, with gratitude being one of those paths. The more we can find ways to reflect on the contrasts between slavery and freedom, the more that we can surmount these slaveries, and the more we can apply these ideas to our daily lives, the more we can relive the freedom that the ancient Israelites felt all those centuries ago.

Trump's Non-Reciprocal "Reciprocal" Tariffs Are Chasing a Nonexistent "Trade Deficit" Boogeyman

Last week on April 2, what Trump dubbed "Liberation Day," Trump declared that "April 2nd, 2025, will be forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again." As the title of this piece indicates, I would argue that what he did could very well be a day that forever lives in the infamy of U.S. history. 

Trump announced a two-tier trade policy: 1) a baseline import duty equivalent to 10 percent on all goods entering the U.S., and 2) so-called "reciprocal" tariffs on 90 countries that are generally equivalent to half of what he purports other countries are imposing on the United States. From Trump's telling, he is using these tariff rates to offset what other countries are allegedly implementing. He even pulled out a chart during his "Liberation Day" speech to illustrate the point. The reason I facetiously put "reciprocal" in quotes throughout is because what Trump claims about other countries' tariff rates and using corresponding reciprocity is false. 

During his April 2 speech, Trump pulled out a chart that supposedly listed tariff rates that other countries were imposing on the United States. As you can see from World Trade Organization's database, they were not tariff rates. Rather than identify the tariff rates, what his economic team did was divide the trade deficit by imports for each country. This ratio represents the extent to which the United States has a trade imbalance with a given country. 

Setting aside for a moment those are two distinct percentages, Trump's take on trade imbalances is that they are bad because he views them as a metric of unfair trade practices and "cheating" the United States. You would have thought we would have left mercantilism in the dustbin of history back in the 18th century, but here we are. I refuted this silly notion that "trade deficits are evil" back in 2017 when he was first toying with the idea. Here were my summary points back then: 

1. There is more to an economy than just the trade balance. 
2. A country running a trade deficit is not just throwing away money. It acquires goods and services that improves consumers' lives, creating a mutually beneficial relationship between the two countries. 
3. The United States ran a trade deficit for decades and its economy grew just fine. 
4. The trade deficit is not a good metric of economic health. 
5. Even if the trade deficit were an issue, the focus would need to be on savings, investment, and capital flows, not trade flows. 

None of this matters to Trump because he is recklessly trying to emulate President William McKinley, the original Tariff Man. Trump imposed a baseline 10 percent import duty (read: tax) on those who had lower rates, but overall imposed tariffs based on this trade imbalance ratio, not the other countries' actual tariff rates. He then divides the trade imbalance ratio by half to get at the new effective tariff rates on each country because he thinks he's a benevolent businessman giving a half-off discount. 

To recap so far, we already have two main issues. The first is that the rationale for implementing these tariffs is baseless because trade deficits are not the evil Trump makes them out to be. He is willing to unravel the global economy because he does not have a clue of how international trade works. I buy a lot of groceries from the grocery store, but they never buy anything from me. I run a trade deficit with my grocery store, but that does not mean I am harmed by the grocery store. Quite the opposite! That money I spend helps ensure I am fed. Even if Trump's depiction of trade deficits were somehow accurate (to reiterate, he is way off), it does not matter because tariffs do not have a statistically significant impact on trade deficits (Furceri et al., 2019). The reason for that is tariffs disincentivize both imports and exports alike. And guess what? All trade by definition is reciprocal because both parties mutually benefit. Trump's tariffs will interfere with that reciprocity, which brings me to the second issue. 

Even if Trump were right about trade deficits, he did not present other countries' tariff rates, but rather the size of the trade deficit that each country has with the United States. He lied about the tariffs being reciprocal by presenting junk math. If you look at the tariff data collected by Cato Institute, you will see significant discrepancies between what the White House claims and what is the actual tariff rate. The chart from economist Justin Wolfers below shows how low the tariffs of major U.S. partners has been prior to the "Liberation" Day spectacle. 

The excuse of reciprocity is nothing but a smokescreen to increase tariffs to 22.5 percent, which is a tariff rate that has not been this high in the United States since 1909. You can put lipstick on a pig and it is still a pig. No matter how Trump talks up tariffs and no matter how much he tries to cut tax rates elsewhere, he is still calling for a major tax increase because tariffs are taxes. 

I wish Trump would look in the mirror when it came to harmful trade practices. While the U.S. has had a relatively low average tariff rate prior to "Liberation" Day, the United States has had plenty of non-tariff trade barriers, including subsidies, quotas, "Buy American" restrictions, protectionist regulatory systems (e.g., baby formula regulations), and the farkakte Jones Act. When adding up these interventions, much like the independent Global Trade Alert has, the United States has actually contributed more trade interventions to the global market than any other country. 

When looking at the Right-leaning Heritage Foundation's Economic Freedom Index, it would explain why the United States ranks 69th in the world when it comes to trade freedom, which is a lower ranking than Canada, France, or Germany. That means if he were to make it truly reciprocal, he would have lowered tariffs for nearly 70 countries because those countries have better trade policy than the United States. If Trump actually cared about trade reciprocity or trade fairness, he would be decreasing U.S. trade barriers, not increasing them. 

Another thing that gets me is that in the Executive Order, he goes on about how the effects of the trade balances include "reducing opportunities for domestic manufacturers to expand, and in turn, leading to lost manufacturing jobs, diminished manufacturing capacity, and an atrophied industrial base." From the sound of this rhetoric, you would think that the U.S. manufacturing industry would be ecstatic about Trump's tariffs. So why did the National Association of Manufacturers (NAM) say earlier this week we need to brace for the tariffs? Here is what NAM had to say shortly before the tariffs were announced: "The high costs of new  tariffs threaten investment, jobs, supply chains and, in turn, America's ability to outcompete other nations and lead as the preeminent manufacturing superpower." 

And if this is so great from America, why did the Dow Jones drop 1,600 points in response to Trump's tariff announcement? The stock market is not a crystal ball about economic performance, but it does generally track with what major corporations expect future profits to be. This makes sense considering that 30 percent of S&P 500 companies derive their revenue from overseas operations. This is to say that neither do major corporations outside of manufacturing believe Trump's assertion that major wealth is going to pour into the United States as a result of these tariffs. The lack of support from those who Trump claims to be helping with these tariffs should give Trump great pause.

Trump's Auto Tariffs Won't Help U.S. Manufacturing, But They'll Make Cars Much More Expensive

Trump is driving the American people crazy (myself included!) with his trade war, pun intended. Last week, Trump announced that he is imposing 25 percent tariffs on automobile and automobile parts imports, which took into effect yesterday. Per the White House's fact sheet announcing the tariffs, Trump believes these tariffs are a national security issue since "excessive imports [are] threatening America's domestic industrial base and supply chains." In his fantasy world, Trump believes that the tariffs will simply encourage manufacturers to bring production back to the United States. Give me a break! There will not be a revival of the manufacturing that the United States experienced in the 1950s because as I explained during Trump's first term, those days are long behind us.

In addition to believing the tariffs will boost manufacturing, Trump also believes that tariffs will make America great again, a claim that has been refuted multiple times here at Libertarian Jew. Whether it is under the guise of national security, fighting the War on Drugs, helping out small businesses, or fighting trade deficits, I have been shaking my head wondering what gives with Trump's trade war. So what makes Trump's latest tariffs especially harmful to the auto industry?  

Let's say that it is not a coincidence that General Motors' stock fell six percent after Trump's announcement about the automobile tariffs. And if tariffs are so good for automakers, why is Auto Drivers America, the largest trade association for U.S. automakers, denouncing the tariffs? Trump is not going to boost manufacturing or improve domestic supply chains because Trump does not grasp how supply chains work for the auto industry. As this table from the Cato Institute below shows, automobiles are not strictly manufactured in the United States. More than half of the content of what many would consider "an American car" consists of foreign parts. 

Some brands will be harmed more than others with these tariffs, but the harm in the auto industry will be widespread. And it is not as if these manufacturers could shift manufacturing to the United States on a dime even if they wanted to. That is not how capital-intensive industries such as this one work. Given how integrated the global market for automobiles is, it should not come as a surprise that these tariffs will increase automotive prices for U.S. consumers. Fragmenting the global supply chain will lead to more inefficiencies, which will contribute to the higher costs. Speaking of which.....

In its 2024 report, the International Trade Commission calculated that a 25 percent tariff on automobiles would decrease imports by 70 percent while increasing average vehicle prices by 5 percent. The chief economist at Cox Automotive, which is the world's largest automotive services and technology provider, had told the New York Times that these tariffs would make the average vehicle $3,000 more expensive, whereas the National Taxpayers Union estimates that these tariffs will increase the average vehicle price by over $6,500. Depending on the model of the car, Anderson Economic Group puts the estimates in a range from $4,000 to $12,000 per vehicle. 

This also means cutting back on automobile choice. To compensate for higher costs, automakers could cut back on various features or even stop selling affordable models. Cox Automotive also projects that there will be 700,000 fewer automobiles than initially estimated because of Trump's trade volatility and the trade war he initiated. That does not exactly sound like helping out the 7.3 million Americans working in U.S. auto manufacturing, now does it? 

What Trump does not understand is that it was freer trade vis-à-vis the North American Free Trade Agreement (NAFTA) that made the automobile industry great, not protectionism. After all, the import quotas that the Reagan administration put on Japanese automobiles in the 1980s had the same unfortunate result, whereas automobile production took off after NAFTA (see chart below). 

Since Mexico is a major participant in the manufacturing of U.S. automobiles, these tariffs (along with Trump's trade war generally) could also push Mexico over into recession territory. Trump cannot coax the automotive industry into bringing its manufacturing back to the United States. What Trump's latest stunt will do is cause supply chain delays in the auto industry, limit automobile choice, undermine his own trade agreement, USMCA, from his first term (which will erode trade relations with other countries because it shows that he can go back on his word), and make cars more expensive. This goes to show that Trump's tariff does not make America great again, but rather really screws over the American consumer.